KUALA LUMPUR: OSK Research said it recently re-visited Bursa Malaysia-listed China shoe companies Xidelang (XDL) and Multi Sports, both based in Jinjiang in China.
In its research note issued on Thursday, Sept 23, it said the managements of both companies were optimistic on the sector outlook.
'While we see competition intensifying as the bigger players penetrate the lower tier cities and a consolidation as inevitable given the industry's highly fragmented structure, we believe this will take time to unfold as there is room for the pie to grow in the near term,' it said.
OSK Research said this is due to a mushrooming world population, disparities in consumer taste - which supports the existence of numerous sports brands - and the hosting of major sports events to stoke demand.
'We maintain our BUY call on Multi Sports at 93 sen. We like its focus on shoe sole production, which makes it less susceptible to changes in consumer demand and preference. Overall this segment remains under-invested within the Consumer sector, on which we remain Overweight,' it said.
In its research note issued on Thursday, Sept 23, it said the managements of both companies were optimistic on the sector outlook.
'While we see competition intensifying as the bigger players penetrate the lower tier cities and a consolidation as inevitable given the industry's highly fragmented structure, we believe this will take time to unfold as there is room for the pie to grow in the near term,' it said.
OSK Research said this is due to a mushrooming world population, disparities in consumer taste - which supports the existence of numerous sports brands - and the hosting of major sports events to stoke demand.
'We maintain our BUY call on Multi Sports at 93 sen. We like its focus on shoe sole production, which makes it less susceptible to changes in consumer demand and preference. Overall this segment remains under-invested within the Consumer sector, on which we remain Overweight,' it said.
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